The Afghan refugees many of whom have made their presence felt in the business circles of Karachi are equally smart investors.

“I have made millions but these days the luck is not favouring me,” said an Afghan investor while talking to Dawn at the office of a money changer on Boultan Market. The 60 plus man from Kabul clad in shalwar kameez and traditional turban was introduced to Dawn by the money changer as an investor.

“People here are losing interest in afghani...so there is not much scope for us,” said the bearded man.

The money changer who declined to be named told Dawn that this old Afghan refugee-turned investor was one of those involved in physical supply of afghani from Kandhar to Quetta to Karachi. There are many others who bring the troubled currency from Kabul to Peshawar to Karachi.

But who really are the buyers? “Local investors from amongst cloth and plastic merchants; electronic and auto dealers and transporters,” replied the money changer. “But now people just do not want to invest in afghani that has lost much of its charm.” The afghani hit a record high of 14,000 a US dollar immediately after the induction of the interim government in Kabul from a historic low of 85,000 a dollar during the last days of Taliban. The afghani has fallen again to 58,000 a dollar in Kabul as the public in Afghanistan has flooded the market with cash to convert the old currency into new afghani that is worth 1,000 times the old one.

In Karachi 1,000 old afghanis are currently equal to one rupee. Ten months ago 250 afghanis fetched one rupee. Thus the currency has shed 75 per cent value within 10 months as speculators are shifting their focus onto other areas including real estate and stocks.

“It is very much possible that Afghans are investing in real estates through their frontmen but they have not been directly involved — not at least in Defence and Clifton area,” said chief executive of Pak Estate Zubair Shaheen.

But a senior dealer at an money brokerage-cum-estate agency told Dawn many Afghan speculators have recently shifted focus from currency speculation to investment in the real estate.

Stock brokers remain tight-lipped but floor dealers say they have heard of some powerful buying from behind-the-scene Afghan investors in the recent days. The KSE 100-share index has gained some 300 points in one month to November 1 on increased buying backed by big dividends.

NEW AFGHANI: Money changers operating from Boultan Market and Godhra Colony behind citycourts say the new afghani is currently trading at Rs1.05/Rs1.15 for buying/selling.

They say that when the new afghani was introduced on October 7 it was trading at Rs1.50/Rs1.70. These money changers — many of them unlicensed say that the investors have given a cold shoulder to the new afghani because they know that it will eventually end volatility in exchange rates leaving little room for speculation.

Leading money changers say there are no real buyers of afghani — old or new: they think that the Afghan currency is being used by the speculators alone.

“People are not buying dollars what to talk about afghani,” said Haji Haroon of Dubai Exchange International “There is no real value of afghani or Iraqi dinar here among the investors,” he said when reached by Dawn over telephone. “There are speculators out there who deal in these two currencies. We never trade in afghani.”

Ovais Kalia of Khanani& Kalia International said most of the money changers had no culture of trading in afghani. “Will you believe I even don’t know how much worth an afghani is,” he said when contacted by Dawn over telephone.

He said he only knew that afghani being a volatile currency is used for speculation. “In the past Iraqi dinar had also been a favourite among speculators but lately we have not heard of it.”

Dawn inquiries reveal that in the local market 3-4 billion old afghanis change hands daily. But there is hardly a real investor buying it. “This is all book keeping,” says one of over a dozen money changers who not only speculate in afhani on their own but also do it for others. There is a ring of money changers who do all buying and selling on books — no physical dealing involved.

When there is some good news about Afghanistan the quote for afghani rises sharply — and when there is some bad news it nosedives. The profits and losses thus booked are settled between the two sides.

The members of this ring operate mainly from Boultan Market, Godhra Colony, Shara-e-Faisal and Saddar. One of them operates under the garb of electronics dealer in Saddar. For another his cloth shop is a cover.

Inquiries reveal that many of the speculators are those who have piled heaps of wealth through smuggling of duty-free cars and jeeps from Afghanistan. “Lately drug money has also started trickling in again,” says a money changer who has links in the land-locked country. The Taliban had banned poppy cultivation in Afghanistan but the fall of the regime last December has led to its revival.

“Supply of drugs from the bordering areas between Afghanistan and Pakistan has restarted,” confides an Afghan businessman who owns a shop in a shopping mall in Saddar. “These people get paid in rupees here...many of them use that money to speculate in the Afghan currency while they are in the town...or through their agents.”

Dawn inquiries reveal that those involved in the smuggling of duty-free cars and jeeps from Afghanistan once used to speculate in Iraqi dinar and Kuwaiti dinar when the two neighbours were at war with each other. A thumb rule for the speculators is that the greater the volatility in a currency exchange the larger the profit. The uncertain situation in Kabul and Baghdad keep their currencies volatile most of the time at home as well as abroad.

Money changers say though the re-denominated afghani has made its way into Karachi market about two weeks ago this is not a favourite among speculators. Because uncertainty about the old afghani gives more room to speculate. A small money changer who is a known trader of afghani told Dawn he hardly buys and sells 5,000-10,000 new afghani that is worth 5-10 million old afghanis.

Others say they transact even smaller volumes. The reason is the new afghani is becoming less vulnerable to volatility — thanks to the actions taken by the Da Afghanistan Bank (central bank of Afghanistan). Governor DAB recently announced to buy $5 million worth of new afghani to keep it stable. He also warned people that all old Afghanis would completely get out of circulation by December 5.